The term ‘Group Health Insurance’ refers to insurance policies that cover a group of members, usually taking in company employees or members of an organization. Unlike other types of insurance, such plans provide the same level of coverage regardless of age, gender, occupation or socioeconomic status. It's common for employers to offer group health insurance to their employees, so the terms employee health insurance and group health insurance are often used interchangeably.
Individuals who are directly or indirectly related to the group may also become eligible for group health insurance. In most cases, group health insurance extends to spouses, children, and even the parents of employees.
Why Do All Businesses Need Group Health Insurance?
Companies can provide comprehensive healthcare to their employees while at the same time minimizing expenses with group health insurance. Well, this insurance policy can also be customized with respect to coverage and limits. Here is a list curated to help you understand why all businesses require group health insurance:
● Helps to attract talented new employees, which is very crucial for the success of an organization
It is very vital to have a well-motivated workforce in order for an organization to grow and become more successful. With a comprehensive health insurance policy, employees can be rest assured that their medical needs are being met.
● These policies are cost-saving which is again a plus point for the company
It is one of the most significant advantages of group health insurance policies that they are cheaper than individual health insurance policies yet offer similar benefits. A larger pool of insured individuals spreads the risk, resulting in lower premiums.
● Group health insurance plans are also very beneficial for saving taxes
Besides offering affordable health insurance to employees, organizations can also claim tax deductions on group health insurance premiums. Companies can save a great deal of money by paying premiums towards group health insurance policies.
● These policies can be customized which gives the organization freedom to select according to coverage and limits
Group health insurance can also be customized to meet the needs of employers. Premiums for group health insurance policies will vary depending on the features selected by the organization.
The Importance of Group Health Insurance in India
There is a change in the equation between employees and employers in the modern era. Several companies in India are taking steps to retain hard-working employees now that they recognize the value of their workforce. Apart from offering decent pay scales, these actions result in various employee-benefit schemes. An adequate group health insurance plan is one of these benefits. Well now, offering policies like workmen compensation insurance and group health insurance has now been made mandatory as per the government regulations.
We'll take a look at why it's so important in India:
For Employers-
● Gives health protection to employees: Group health insurance plans provide health protection to the family of an employee, which eases the employee's worry about their health as well as of their loved ones.
● Productivity will be increased: Employees are more likely to perform better and go the extra mile when they are stress-free about their medical needs.
● Attract and retain talent: Group health insurance plans give employees a sense of belonging within the organization. The best part about this plan for a company is that it helps the company to attract more talented people.
● Boosting goodwill: In the modern era, it’s very vital for any organization to have an excellent reputation inside as well as outside the company. Apart from a good company environment, culture, and growth rate, a set of compelling corporate health benefits makes sure that the overall goodwill of the company increases in the market.
● Cost-saving benefits: Company contributions to group health insurance plans are considered cost-saving. As compared to individual health insurance, employers have to pay less premium in a group health insurance policy.
For Employees-
● Don’t have to wait on pre-existing diseases for treatment: In a group health insurance policy employees don’t have to wait for an amount of time like a health insurance policy. This plan covers pre-existing diseases without any waiting period or in zero days.
● Right motivation tool: An appropriate group health insurance tool works as an excellent motivation tool for employees. It makes them feel valued in the organization, which in effect contributes to a happier workplace and leads to higher productivity.
● Enhances their mental well-being: The performance of most employees is often affected by stress due to financial pressure or other personal reasons which can lead to lower productivity levels at the workplace. The group health insurance policy helps to enhance their overall well-being and safeguard their savings.
● Claims process is very easy: A major benefit of group health insurance to employees is that their claims are handled on priority and they have no hassles throughout the process. Mainly, it is taken care of by the insurance company and the third-party administrator.
What Does Group Health Insurance Cover?
Group medical insurance coverage usually includes the following:
● All pre-existing diseases are covered under this plan.
● This policy covers maternity benefits from day one of a female employee’s joining. Some plans apply a waiting period of 9 months and some do not.
● This plan offers coverage for newborn babies right from the 1st day of their birth,
● Many group health insurance plans also cover the cost of an ambulance to a hospital.
● The plans include medical costs incurred by the insured before and after getting admitted to a hospital.
● Domiciliary expenses get covered up to a certain percentage of the sum insured under the group policy.
● This health plan covers daycare expenses up to the total sum insured.
● This group health insurance policy covers medical practitioner fees.
● This policy also covers facilities like a consultation room for diagnostic rent, nursing charges, operation theater charges, anesthesia, oxygen, blood, and others.
● Some policies may also include the cost of chemotherapy, radiotherapy, pacemaker, etc.
What Group Health Insurance Doesn’t Cover
Check out the exclusions of group health insurance cover below:
● Under this health insurance plan, the insurer's parents may not be covered.
● Treatments like Homoeopathy and Ayurveda do not get covered.
● This health policy is only valid until employment cessation.
● Any ailments caused by drugs or alcohol are not covered under this health plan.
What Impacts the Group Health Insurance Policy Cost?
It is common for health insurance providers to use their own set of parameters to determine the price of quotations. In spite of this, all of them consider certain common parameters. As a result of assessing the people, process, and product factors mentioned in the application by the company, the health insurance provider will provide you with a final quote.
Let's take a quick look at some of the top factors that might affect your insurance premium.
Three Major Factors That Are Related To Group Health Insurance Cost:
- People
Insurance companies evaluate your company based on employee demographics. They will evaluate the following points before moving further with the process:
● The number of employees in the organization plays a vital role in the premium. Companies with more than 50 employees get a chance to negotiate with insurance companies over the group health insurance premiums.
● Health insurance premiums tend to be lower if your employees are younger, but older employees tend to have ongoing health issues. Knowing that older employees are more likely to need health insurance, coverage for this age group is generally more expensive.
● If an organization has a higher count of female employees aged between 20 and 30, there is a likelihood of increased premiums. Insurance companies would take into account the potential requirement for prenatal or maternity care among these employees, thus increasing the risk and resulting in higher premiums.
- Claims History
Claims history plays a crucial role in determining the cost of employee health insurance. Insurers analyze the claims history to assess the level of risk associated with providing coverage to a particular group of employees.
Several factors related to claims history can impact insurance costs:
- Frequency of Claims: Insurance companies consider the number of claims filed by employees in the past. If a group of employees has had a high frequency of claims, it suggests a greater likelihood of future claims, which can result in higher premiums.
- Severity of Claims: The severity of past claims is another important factor. High-cost claims, such as those involving hospitalization, surgeries, or chronic conditions, can significantly impact insurance costs.
- Trend Analysis: Insurers analyze the claims data over a specific period to identify any patterns or trends. If the claims costs have been consistently increasing or if there are specific conditions or procedures driving up the costs, it may influence future premium rates.
- Risk Pool: Insurers assess the overall risk pool, which refers to the collective health status and claims experience of the covered employees. If the risk pool has a history of high-cost or frequent claims, it can lead to higher premiums for the entire group.
- Coverage
The extent of coverage and plan design chosen by the employer also affects the cost. Comprehensive plans with lower deductibles and broader coverage typically have higher premiums.
How to Save Money on the Group Health Insurance Policy:
● Shop Around: Don't settle for the first insurance provider you come across. Obtain quotes from multiple insurers to compare costs and coverage options. Consider working with an insurance broker who can help navigate the market and negotiate better rates.
● Promote Employee Wellness: Implement wellness programs and initiatives that encourage employees to lead healthier lifestyles. This can include offering gym memberships, health screenings, smoking cessation programs, and educational resources. By promoting preventive care and healthier behaviors, employers can potentially reduce healthcare costs in the long run.
● Educate Employees on Healthcare Costs: Provide employees with transparent information about the cost of healthcare services. This can help them make informed decisions and choose cost-effective providers or treatment options.
● Consider Self-Funded or Partially Self-Funded Plans: Self-funded or partially self-funded plans allow employers to assume more control over the insurance costs by directly funding a portion of the healthcare expenses. This can potentially lead to cost savings, particularly for organizations with a healthy employee population.
● Conduct Regular Plan Audits: Periodically review your group health insurance plan to identify any inefficiencies or areas for improvement. Assess whether the plan is aligned with the needs of your employees and consider making adjustments to maximize cost savings.
Importance of Having the Right Group Health Insurance Broker
Having an insurance broker to guide you in buying employee health insurance can provide several benefits and add value to your decision-making process. Here are some reasons why an insurance broker is important in this context:
● Expertise and Industry Knowledge: Insurance brokers specialize in navigating the complex world of insurance. They possess extensive knowledge of insurance products, policies, and the insurance market. With their expertise, they can help you understand the intricacies of employee health insurance, including coverage options, plan designs, and regulatory requirements.
● Market Access and Negotiation: Insurance brokers have access to multiple insurance carriers and can obtain quotes from different providers. This allows you to compare offerings and premiums from various insurers, ensuring you get the best possible coverage at competitive rates. Brokers also have negotiation skills and leverage in dealing with insurance companies, potentially securing better terms and pricing on your behalf.
● Time and Resource Savings: Buying employee health insurance involves a significant amount of time and effort. Insurance brokers handle the legwork for you, saving you valuable time and resources. They handle paperwork, gather quotes, analyze proposals, and provide comprehensive information, allowing you to focus on other critical aspects of your business.
● Ongoing Support and Advocacy: Insurance brokers provide ongoing support throughout the policy term. They assist with claims management, address employee inquiries, help with plan administration, and act as advocates between you and the insurance company. If any issues or challenges arise, brokers can step in to provide guidance and resolution.
How Can Raghnall Help?
A reputed risk advisor and insurance broker in Mumbai, Raghnall provides businesses with health insurance solutions and advice to pick the best one according to the company's needs. We ensure that the health insurance coverage we offer from top providers meets the requirements of our clients. We use our expertise and connections so that our corporate health insurance solutions give you an edge over your competition.
Besides providing customized coverage, Raghnall also provides Insurance and Reinsurance solutions tailored to your needs. The teams at our company specialize across many different sectors, ensuring that we understand your needs as well as procure the most appropriate form of protection based on those needs.
Interested in availing group health insurance and employee benefits solutions?
Contact Raghnall Insurance Brokers today to find out more!
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